Phylogy Raises $7.6M

DSL equipment vendor Phylogy has raised $7.6M in Series A preferred stock financing

June 16, 2006

2 Min Read

SUNNYVALE, Calif. -- A week after unveiling its new product, which enables triple play services to be offered over standard DSL lines, Phylogy Inc. said it has raised $7.6 million in Series A preferred stock financing.

Chicago-based KOVentures led the June financing round, joined by various high-net worth individuals. KOVentures Managing Member Kurt Oelerich is joining Phylogy's board.

Phylogy's equipment, called the TripleStream Line Conditioner, enables telco broadband service providers to offer video, voice and data services over existing copper-based DSL networks.

Sunnyvale, Calif.-based Phylogy was founded in 2003 by Chief Technology Officer Luis Larzabal and Chief Operating Officer Edward Ponganis. Both previously worked for publicly-traded semiconductor developer ZiLog Inc.; Larzabal was director of advanced communications products and Ponganis was CTO.

"It was literally two guys in a garage for the first year and a half," President and Chief Executive Timothy Mueller said. Phylogy now has seven employees and with the new money, the company will likely expand to about 20 employees within 12 months, he added.

DSL, or digital subscriber line, is deployed using a copper-based line, called a local loop, which stretches between the telephone subscriber's premises and the telephone company. Typically, the strength of the DSL signal starts to dissipate at the halfway point. Phylogy's equipment is installed at the loop's halfway point and is designed to "clean up" and amplify the signal's integrity as it travels to customers toward the end, or at the end, of the loop.

Phylogy was tested in field and in lab trials for the last six months with half a dozen unnamed telephone companies, Mueller said, and the product was officially introduced last week. Phylogy will disclose the name of its first customer within about 60 days, the CEO added.

Using value-added resellers, Phylogy plans to sell its products to telephone companies, including independent local exchange carriers, regional Bell operating companies and rural telephone cooperatives.

The company intends to use the capital for sales and marketing and for additional product development, Mueller said.

Phylogy's primary reseller in the U.S. is diversified manufacturer Charles Industries Ltd., based in Chicago. Internationally, Phylogy is meeting with several large telco conglomerates interested in European, Pacific Rim and South American distribution.

Phylogy Inc.

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